No one holds a crystal ball that can look into the future, but here are some real estate predictions and advice made by leading real estate expert Barabara Cocoran for 2011. Excerpts taken from a recent interview she held with Aol Real Estate:
The State of the Market in General
“If the job market improves, we will see an immediate improvement in the residential market.”
“If the government comes in with some great incentives, as they did last year, first time home buyers will get a jump up in the real estate market as well.”
“The more that’s written about how terrible the housing market is, the more apt people are to sit back and do nothing.”
Advice for Buyers
“Of course anyone in this market with so many mixed signals is nervous about buying,” she acknowledges, “But my advice would be to not wait. If there is one thing I’ve learned about this real estate market, it is that it usually takes a very long time to unwind, but once it decides to turn around, those prices will move up very quickly, and you’ll just be joining every other Tom, Dick, and Harry out there bidding on the same house.”
“Now is a particularly good time to buy since interest rates are so low. Just five years ago rates were up at 8 percent. Now they are down at 4.5 percent. That’s a phenomenal savings and people don’t realize it.”
“What happens in the real estate business is that people are more comfortable buying when everyone else out there is buying and overbidding on property,” she says. For some reason, folks feel like they are making a smart decision if they are moving along with the herd.
Advice for Sellers
“They need to do a couple of things: First, they should be thinking about pricing their home for exactly what it’s worth. The strategy of pricing a home high and letting buyers make a lower offer can backfire.”
“In today’s market, it takes seven bids from buyers to get one acceptable price. If you haven’t gotten seven bids, you have no hope of selling a home. So, you want to price it right against the bone so people are willing to bid.”
“You are in competition with your neighbors. They are competing with you to sell their house, so you had better make sure that yours is prettier than theirs.”
How do you do that? You make the inexpensive improvements that buy you some “fashion sense.” You even consider staging your home and renting furniture. You do the little things that people notice. “Whatever you need to do to make your house compete best with the neighbor that is selling his home,” she says.
Will Home Prices Rebound in 2011?
The good news is that she wouldn’t be surprised if prices returned to the same level—and then push even higher—within the next three years. “Real estate markets can recover much faster than they can fall,” she says. “I’ve seen it time and time again. And so miracles can happen.”